The stock trend is your friend until it bends at the end

Recognizing stock trends can help you to make better stock investment decisions. Generally, upward trends may be favorable for buying stocks.

Downward trends can be a good time to sell stocks or short sell stocks. It would be wise to stay on the sidelines during sideway trends.

Within the trends are price patterns which you may use to decide your ideal entry or exit price.

Understanding the 3 types of trends

An uptrend is characterized by a series of higher lows (HL) and higher highs (HH)

Between year 1998 to 2000, the STI was in a steady upward progression

A downtrend is characterized by a series of Lower Lows (LL) and Lower Highs (LH)

This is a textbook example of a Singapore stock market downtrend between 1997 -1998.

A sideway trend is characterized by stock movements between a previous high and a previous low.

From 1994 to 1997, the Straits Times Index is stuck in a range.

You should avoid stock investments during a sideway trend unless you have a method to look for signals to a possible market top or market bottom

Return from Stock Trend to Stock Timing

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